Where CBI Answered an Economic SOS
When the Grenada Citizenship by Investment (CBI) programme was launched in August 2013, it was believed by many to be the only way to save the island from an economic downfall.
Grenada’s Prime Minister Dr Keith Mitchell pushed the passport scheme in 2013 as his government battled economic struggles whipped up by the global financial downturn. Government declared that the programme would become a main source of revenue to help develop the island and pay outstanding debt to international creditors and lending agencies.
The programme offers individuals the ability to buy its passport in as few as 60 days at a minimum cost of USD $150,000 USD in addition to USD $8,000 processing fees. In 2018, five years after the programme started, the International Monetary Fund (IMF) warned of an overreliance on CBI inflows, noting that the programme accounted for 4.5 per cent of GDP in 2017:
“Further improve mechanisms for monitoring the proceeds of CBI inflows and recording all flows through the consolidated fund on budget to improve fiscal management and reporting,” was a major red flag from the IMF, which also asserted that “strict enforcement of the due diligence process of the CBI program are critical for Grenada’s continued stable access to cross-border bank payments”.(https://www.elibrary.imf.org/view/journals/002/2018/236/002.2018.issue-236-en.xml)
Source: IM Daily https://www.imidaily.com
The CBI program based on projections in the budget estimate is expected to remain a vital earner for Grenada’s economy. Red Flags
By law, the identity of beneficiaries under the programme is a tightly kept secret – just one of the restrictions that raises a transparency red flag for a programme that plays a major role in raising cash and investments to boost economic growth.
Grenada is just one of five countries in the English-speaking Caribbean to offer the programme. Through these schemes, non-nationals can purchase citizen status after making financial commitments to invest in real estate or special funds set up by the governments.
But there have been longstanding concerns by citizens, local anti-corruption lobbyists and powerful development partners in Europe and North America that the passport schemes could be abused to shield bad actors like money launderers and terrorism financiers.